The “starter” mining operation confirmed by the PFS was based on the 5.9 million tons of the measured and indicated components of the total JORC coal resource estimate of 8.1Mt.

The PFS outlined two possible scenarios for an initial 250,000tpa contractor-driven operation.

In scenario A, raw coal is sold on a free carrier basis at the Titiribi mine gate, excluding an additional transport or logistics costs.

Under this scenario, initial start-up capital of just $US7.8 million was outlined, with an average cash operating cost of $44 per ton.

Under scenario B, Ascot would send coal by conveyor across the River Cauca, involving the construction of a 2km bridge conveyor and increasing initial start-up capital to $14.3 million, with an average operating cost of $84 per ton.

An additional $2.1 million in development capital is required for either scenario to ramp up production to 400,000tpa.

The total capital required to achieve long-run production rate of 400,000tpa suggests average capital intensity in the order of $35/t, which Ascot said compared favorably to the industry average.

The outcomes were based on a blended metallurgical coking coal product with low ash, ultra-low phosphorus, medium volatiles and free swell indexes averaging 6.7.

Ascot executive chairman Andrew Caruso said the PFS supported the company’s objective of targeting projects that exhibit near-term production and low development capital.

"In the near term, the company will continue to advance environmental and mining approvals, complete ‘trade-off’ studies and position the project to interested parties prior to the commencement of the feasibility study later in 2013,” Caruso said.

"In tandem, the company will also begin to undertake further infill drilling and exploration work at the Lara concession, as well as progress discussions and negotiations with surrounding concession owners to expand the Titiribi project site.”

Ascot said it expected to move into its feasibility study carrying both development scenarios for added flexibility.